Civil Practice – Statute of Limitations – Constructive Fraud

The statutes of limitation for fraud, negligent misrepresentation, and violation of the North Carolina Investment Advisers Act, were triggered and had run months before the filing of this lawsuit.

We granted in part and denied in part the motions for summary judgment.

The underlying dispute arose from an alleged securities fraud scheme involving private investments. Plaintiff Steven C. Hart sought damages from his investment advisers and their firms. Hart a hydrogeologist who operates a successful environmental consulting firm. Given his status as an accredited investor, Hart is considered financially able to tolerate greater risk than other investors, giving him access to certain investments not generally available to the public at large.

Defendant DWM Advisors, LLC was formerly a North Carolina limited liability company that maintained its principal place of business in Durham County, North Carolina. Established in 2009, DWM provided financial planning and direct investment portfolio management services. Defendant Airis Alexander Abolins joined DWM shortly after it began operations and had various titles including Director, Chief Investment Officer, and Senior Vice President for Research and Analytics.) In 2010, Abolins became a 2.5% owner of DWM.

Among other things, Defendants asserted that the statute of limitations has expired on Hart’s claims against them. Defendants contended that the statute of limitations started a decade ago, when Hart was provided offering materials describing the highly speculative nature of one of his private investments. Defendants asserted that, at the latest, the statutes of limitation for fraud, negligent misrepresentation, and violation of the North Carolina Investment Advisers Act, were triggered and had run by April 2021, months before Hart filed this lawsuit. Because Hart did not pursue these three claims in time, we granted defendants’ motions with respect to them.

On the other hand, Hart’s claim for constructive fraud both survived the motions and has a 10-year statute of limitations. There is evidence upon which a jury could conclude that Hart’s fiduciaries deterred him from suspecting or discovering the alleged fraud. Consequently, when the statute of limitations began to run on Hart’s claim for constructive fraud is a jury question.

Granted in part, denied in part.

Hart v. First Oak Wealth Management LLC (Lawyers’ Weekly No. 020-011-25, 67 pp.) (Julianna Theall Earp, J.) 2025 NCBC 11. Mauney PLLC, by Gary V. Mauney, for Plaintiff Steven C. Hart; Bell, Davis & Pitt, P.A., by Joshua B. Durham and Kevin J. Roak, for Defendant Airis Alexander Abolins; Vann Attorneys, PLLC by James R. Vann and Ian S. Richardson, for Defendant First Oak Wealth Management, LLC; Defendants DWM Advisors, LLC and Joseph P. Davis, III have not appeared. North Carolina Business Court